It has become this year's most prestigious rich list. If your name is not on it, you are either not a billionaire or, in the financier Ted Forstmann's words, you are both a billionaire and "a jerk".
So far, 58 billionaires have signed The Giving Pledge, an initiative made public by Bill Gates and Warren Buffett this year, whereby individuals or families pledge to give at least 50 per cent of their wealth to charitable causes.
Mark Zuckerberg, the founder and chief executive of Facebook, the world's youngest billionaire, is the most recent high-profile signatory, but Michael Bloomberg, Warren Buffett, Bill and Melinda Gates and George Lucas are all on the list, and the AOL co-founder Steve Case and the former junk bond trader Michael Milken have also just signed up.
It is not unusual for the wealthiest Americans to commit so much to philanthropy, in a country where the prevailing view is that the job of looking after the most vulnerable in the society should not be achieved by the government levying more taxes on the rich but by the rich volunteering more cash from their own pockets. However, the scale of The Giving Pledge and the publicity that it has generated is unusual and in many quarters controversial.
What has this wave of pledging by America's super rich achieved? With 58 billionaires currently signed up, you could argue that that already represents a pretty good fund-raising drive.
But essentially, The Giving Pledge is just a high-profile statement of intent. The pledge represents a moral commitment to give, not a legal contract, and those pledging their wealth have only to say that they will commit these funds to philanthropy at some point during their lives or after they die.
Furthermore, although part of the idea is that The Giving Pledge will become a forum to exchange ideas about the best way to make philanthropy count, the emphasis is much more on who is donating than on how the cash will be disbursed.
The Giving Pledge neither pools funds nor supports particular causes. That is left to the individual, who is under no obligation to reveal what causes he or she supports.
These high-profile but vague avowals of support have generated much criticism.
Non-profit groups have expressed concern that there is no evidence that those who sign The Giving Pledge will specifically funnel cash to the most vulnerable in society - those who have been hit by cuts in government support and a decline in philanthropic giving during the recession.
Some who are part of The Giving Pledge have already made such a commitment: Mark Zuckerberg recently gave US$100 million (Dh367.3m) to the public school system of Newark, New Jersey. But overall, critics say The Giving Pledge offers no master plan, or indeed any plan, to solve society's problems.
And far-right advocacy groups are angered by what they see as an effort to press-gang the wealthy into parting with their money. The Ayn Rand Centre, a group modelled on the libertarian views of Ayn Rand, the author of Atlas Shrugged, has criticized Mr Zuckerberg and the others who are part of The Giving Pledge as trying to make other business people feel guilty for trying to keep their money.
A September article in Forbesmagazine jointly written by the centre's executive director, Yaron Brook, and of its analysts, Don Watkins, argued: "The Pledge treats your wealth, not as a justly earned reward, but as a gift from society - one that came with plenty of strings attached. The message is: Fulfil the obligation that came with your riches, give your wealth away - or hide your face in shame."
Of course, if this initiative succeeds in galvanising other wealthy potential philanthropists into action, even if their motivation is the positive publicity and the opportunity to avoid looking like shame-faced jerks, many would consider that a very good thing.
But beyond this, it is almost impossible to assess what the real-world impact of The Giving Pledge will be.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
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